YEREVAN (RFE/RL)–A joint committee comprising senior Armenian government officials and representatives of several Japanese industrial groups met for its first session in Yerevan on Tuesday–exploring the possibility of large-scale Japanese investmen’s.
Senior executives from Japan’s several famous conglomerates such as Sumitomo–Mitsubishi and Mitsui showed interest in Armenia’s energy–mining and chemical sectors that have been struggling to remain afloat since the collapse of the Soviet Union. The Japanese firms expressed readiness to launch a number of large-scale investment projects provided that they get Armenian state guarantees against possible financial losses. The Armenian government has so far been unwilling to share risks. Western finance organizations–notably the International Monetary Fund–have argued against such guarantees.
Last January–the Mitsubishi group offered to build a brand new thermal power station in Yerevan with a capacity of 400 megawatts. The Japanese industrial giant said it would extend a 40-year loan to Armenia to underwrite the plant’s construction in return for the state guarantees. Armenian energy officials suggested instead that Mitsubishi complete the long-running construction of the Unit 5 of the Hrazdan power station in central Armenia. But the Japanese countered that its technological design is already outdated.
Deputy Energy Minister Karen Galustian said on Tuesday that the government’s strategy is to upgrade its power generating capacities in the next "10 to 15 years" but it remains reluctant to provide insurance for private investmen’s. "Our approach is that the state won’t give guarantees that will have a direct impact on the country’s foreign debt," Galustian told RFE/RL. Conditions are already favorable for investing in the Armenian economy–he argued.
Mining is another area of Japanese interest. Mitsubishi has been weighing up investmen’s in the production of copper and molybdenum in southeast Armenia. The group appears ready to set up a joint venture with the government–it was revealed on Tuesday.
Participants of the committee meeting visited the Nairit chemical company in Yerevan–the flagship of one of the principal sectors of Soviet Armenia’s economy. In 1997–Japan’s Sumitomo offered to invest $100 million to re-vitalize the sprawling factory. However–differences over the state guarantees meant that the project did not get off the drawing board. The tour of Nairit may signify renewed negotiations with Sumitomo.